In the last two decades, the world has rapidly transformed itself into becoming a tech-savvy world. Today, payments are cashless, purchases are digital, and data is stored on clouds. However, the question lies if we are enough by being adept with today's technology. Unfortunately, the answer is no. Those who learned it in time progressed, and those who did not adapt to the change fell behind in the race. Today, people, especially youngsters, like to think ahead of time, plan accordingly and develop technology that would suffice the human race for years to come.
What Is Cryptocurrency?
In such a scenario, many have bet that beyond stocks and investments, cryptocurrency is predicted to be the future of transactions. However, it is easier to understand the tangible than understanding what one could not see or feel. Cryptocurrency could be defined as a form of payment that can be exchanged online for goods and services. Companies often issue their currency, which they call 'tokens' or 'points'. One could easily purchase a good or service from a particular company by giving them those tokens. However, the tokens could only be bought using actual currency. For a better understand, one could associate these tokens with currency chips in casinos. One could spend as many chips as they desire but use his money to buy new tokens.
More than 14,500 cryptocurrencies are traded publicly worldwide, and more continue to become a part of the market. The grab the investors' attention by promising better returns in the future. In some cases, investors appreciate that no central banks are managing the crypto market. The freedom allows the market to be typically decentralized to be used over the internet. Cryptocurrency at easy disposal makes it possible to transfer value online without the need for a middleman like a bank or payment processor, allowing value to move globally, near-instantly, 24/7, for low fees.
Peer to peer networks of computers manage cryptocurrency through open-source software, and no governments are involved at any stage. Therefore, anyone who wishes to enter the crypto market can do so. However, every currency in the market has its blockchain. A technology named 'blockchain' is used to guarantee secured payments and is similar to a bank's balance sheet, often dubbed a virtual ledger. The particular blockchain is an ongoing and constantly reverified record of any transaction done using the cryptocurrency.
Using Crypto For Transactions
Experts often believe that one cannot encounter any scam or fraud in cryptocurrency, unlike online bank frauds, credit card or gift-card scams. Another reason to substantiate the mammoth shift to the crypto market is that it requires no personal details. For instance, if one purchases goods from a garment merchant and chooses to make the payment via a credit card, he would have to reveal his security pin for the transaction to complete. The receiver receives his money in a few seconds in cryptocurrency, and one cannot manipulate it because it is all automatic and digital. For a similar transaction in the crypto market, the purchaser would not have to give any security key, and the receiver would receive his money without any delay.
Since the crypto market is virtual, functions on instant payment systems and does not have a regulatory body, the payment process avoids all the paperwork, all at the comfort of the people managing it. The viability, ease and speed of payment is a big plus while discussing the advantages of the virtual currency.
Security And Scams In Market
However, like there are advantages for everything, there are disadvantages as well. One of the most prominent questions that arise when one thinks about investing in cryptocurrency is how secure it is. Everything is rosy when people with abundant money invest in the crypto market because they know that they can still stand their footing in society even if they lose. On the other hand, an ordinary man would never (apart from exceptions) dive into the ocean of the crypto market with all his life savings. The fear of losing all that he had earned in his life is too big to ignore. Moreover, since there is no regulatory agency like the Reserve Bank of India(RBI) in the case of banks, people are afraid because they have nowhere to go to complain about any mishap, in case it happens.
Since there is no regulation and payments are concluded in a fraction of a second, the crypto market could inadvertently encourage illegal trade. No government across the world can ban the illicit trade in cryptocurrency because they do not regulate it. The volatility of the crypto market is unrealistically high. Therefore, nobody can guess if the crypto market would lead them from rags to riches or vice versa. One has to be on top of their game with trends in the market and in the news to make money. Anyhow, one must be prepared for any situation while investing in the crypto market. The tide can turn for the worst overnight.
The Present Day Scenario In India
More than ten crore people, primarily youngsters and a few senior citizens, have invested in the crypto market in India. Over ten crore cryptocurrency owners in India put us ahead of the United States, although the latter outstrips us in concern with the value of the holdings. The Central government is all set to table a crypto bill in the upcoming winter session of the Parliament, the news of which led to several drops in the crypto market. While addressing the virtual meeting of the Sydney Dialogue, Prime Minister Modi had said that all democratic countries must work together to ensure that "it does not end up in wrong hands, and spoil our youth".
The official wording of the Bill seeks to 'prohibit all private cryptocurrencies in India, and create a facilitative framework for the official currency to be issued by the Reserve Bank of India'. In any case, the government would not impose an outright ban on the use of cryptocurrency. Still, it would initiate regulatory measures in case the Bill is passed in the Winter Session.